TRADE NEWS BULLETIN Volume 2 Number 78 Tuesday, May 4, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ THIRD MEETING ON SIDE AGREEMENTS PLANNED Negotiators from the U.S., Canada and Mexico will meet in Ottawa May 12 and 13 for the third round of discussions on supplemental accords to the North American Free Trade Agreement (NAFTA). "It will be the first serious drafting session," said a Canadian government spokesman. The first two meetings, which took place in the United States and Mexico, centered around labor and environmental issues and their enforcement mechanisms. Although nothing has been concluded as to how the side accords will be regulated, negotiators plan to press forward with the drafting process anyway. Despite U.S. Budget Director Leon Panetta's comment last week that NAFTA was "dead," other officials seem confident that supplementals will contain the necessary elements to win approval from Congress. "I think once Congress understands how we're making NAFTA better, they'll agree it should be approved," said Treasury Secretary Lloyd Bentsen. Deputy Secretary of State Clifton Wharton agreed. "Once parallel agreements to strengthen protections for the environment and workers are completed, we will seek -- and I am confident that we will win -- congressional approval of NAFTA," said Wharton. Sources: "NAFTA Negotiators to Meet in Canada May 12 and 13," REUTER, May 3, 1993; "Senior U.S. Official Expects NAFTA to be Approved," REUTER, May 3, 1993; "Bentsen Gives Thumbs-Up on NAFTA," UPI, May 3, 1993. ________________________________________________________ MAQUILADORA WORKERS ORGANIZE INDEPENDENT LABOR UNION Workers at two U.S.-owned maquiladora factories are again trying to organize themselves independent of the government-controlled unions. Employees at Plasticos BajaCal, who receive $60 to $80 for a six to seven day work week, say they are forced to work overtime under unsafe conditions. Ten workers of the plant were fired soon after they distributed a flier informing other employees of their efforts to organize an independent union. Meanwhile, workers at a Glenn Industries furniture plant took over the building soon after the company closed the plant without paying wages due to 125 workers. Under Mexican law, the workers can sell the equipment to compensate themselves, but workers say their rights are limited. "We are struggling for a judgment that awards us all the property of the company," said one worker. "But the parent factory in the U.S., Glenn of California, is the sole owner of all the equipment, tools, furniture, and raw materials. This allows them to skirt their responsibility to Mexican workers." The maquiladora region is located along the U.S.-Mexico border and allows American businesses to assemble products and ship them back to the U.S. at reduced tariffs. Source: "Tijuana: Maquiladora Workers Organize," LABOR NOTES, May, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ FRANCE TO ANNOUNCE POSITION ON GATT MAY 12 French government officials said they will publicly announce a position on the General Agreement on Tariffs and Trade (GATT) at a cabinet meeting May 12. The announcement will likely postpone a scheduled May 10 European Council vote on the U.S.-EC farm trade accord reached last November. "It's very probable that a vote will be postponed until after May 10," said a French official. GATT supporters had hoped the farm deal, which limits the EC's oilseed planting area, would help conclude the Uruguay Round of GATT. France has been criticized for blocking the U.S.-EC farm accord. EC Farm Commissioner Rene Steichen said he would like to give the French government time to establish its position on GATT before forcing them to vote on the oilseed deal. Source: "French Government to Define GATT Stance on May 12," REUTER, May 3, 1993. ________________________________________________________ Other Trade News ________________________________________________________ CLINTON HINTS AT LIMITED MFN FOR CHINA President Bill Clinton hinted that he may seek limiting Most Favored Nation (MFN) trade status for China unless certain human rights conditions are met. During a meeting this week with Hong Kong's governor, Chris Patten, Clinton said he did not wish to isolate China, but that economic reforms must be accompanied by "responsible behavior and respect for human rights." Patten argued limiting trade status would severely hurt the Chinese economy. The meeting came just days after a bill was introduced to Congress which ties MFN status to human rights conditions. The bill would renew MFN status when it expires on July 3 this year, but would impose conditions on renewing 1994 trade status. Conditions include progress on human rights, accounting for and releasing political prisoners, prohibiting exports made by forced labor, ending unfair trading practices and adhering to guidelines on transfer of missiles and weapons of mass destruction. Failure to meet these would result in revocation of MFN for state-owned enterprises only. Levi Strauss has decided to reduce its contracts and eliminate direct investment in China because of human rights abuses. Some officials are concerned that the Levi decision will spark an exodus of American businesses located in Hong Kong. Ian Perkin, an economist at the Hong Kong Chamber of Commerce, said contracts can be redistributed to Southeast Asia, eastern Europe or Mexico. However, Frank Martin, president of the American Chamber of Commerce (AMCHAM), disagrees. "I don't think it's going to establish a trend or have any significant impact," Martin said. AMCHAM estimates direct U.S. investment in China at $5 billion. Sources: David Stamp, "Levis Unlikely to Lead U.S. Exodus From China," REUTER, May 4, 1993; "Clinton, Hong Kong Leader Discuss China-U.S. Trade," REUTER, May 3, 1993. ________________________________________________________ Produced by: Kai Mander and Gigi Boivin The Institute for Agriculture and Trade Policy (IATP) 1313 Fifth Street SE, Suite #303, Minneapolis, MN 55414-1546 USA Telephone:(612)379-5980 Fax:(612)379-5982 E-Mail:kmander@igc.apc.org ________________________________________________________